Continuing care retirement communities in New Mexico now are required to provide residents with a plan for relocation in the event that a community may close in the future.
A state association representing CCRCs, however, said that it is not possible for a community to spell out such plans in writing.
Senate Bill 152 amends the state’s Continuing Care Act. In addition to requiring CCRC contracts to contain a provision describing the community’s plan for resident relocation upon potential closure in the future, major provisions scheduled to take effect June 18 include requiring comprehensive actuarial analysis of CCRC agreements and giving the attorney general and Aging and Long-Term Services Department the ability to review disclosure agreements and investigate any reported violations.
Vicente Vargas, executive director of the New Mexico Health Care Association, said that CCRCs cannot definitively say in advance what will happen to residents if a community closes.
“Facilities are going to start stating that, upon closure, we are at the mercy of the process — and that process is dictated by the state department of health and the bankruptcy court,” Vargas said. “It could go so many ways. You can’t really lay out what happens during a closure.”
Vargas said that the state does not have an issue with its CCRCs, and that the additional language in contracts represents a “minor inconvenience” to providers. But the new requirement “stings,” he added, because it was promoted by a minority of residents reacting to a CCRC closure that occurred more than a decade ago. Those residents, Vargas said, also want access to actuarial reports to review investments to ensure that their funds are paying for “direct care” rather than paying for the improvement or expansion of communities.
The ALTSD noted that issues have arisen about the solvency of CCRCs having little or no equity to cover unexpected shortfalls in cash flow. Such issues result in bankruptcy and the need to relocate residents with very little notice, according to the department.
SB152, the ALTSD contends, allows for better oversight of CCRCs, permitting the Office of Superintendent of Insurance to evaluate financial disclosure statements and provide greater protection to residents, many of whom have invested a significant portion of their life savings in the communities.
“This clarified requirement will provide residents with greater transparency regarding the solvency of the CCRC, and if there are any concerns about potential closure, ALTSD can work with the CCRC, the state Long Term Care Ombudsman, Department of Health and other state agencies to prepare for any potential closure,” according to ALTSD.
